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Extracting Insights 2018

26 September 2018

The green shoots of recovery for mining companies that were the headline trend of 2017 have failed to materialise. Our annual analysis of the performance of AIM listed mining companies shows that, despite a stalled recovery, there have been some success stories.

Mining companies Market capitalisation

The total market capitalisation for mining companies on AIM has fallen from just over £5bn to £4.84bn. This total for mining companies is still larger than total market capitalisation in 2014, 2015 and 2016. The other more positive figure is the average market capitalisation for a mining company which has continued a four-year trend of growth to reach £42million.

Less mining can be good.

The number of mining companies listed on AIM has fallen from 125 to 115 since June 2017. However, the causes of this fall are not all negative. Seven of the de-listings were due to transfers to the main market or takeovers.

Mining and funding

The amount of secondary funding raised by mining companies rose from an average of £7.5m in 2016/17 to £8.3m last year. The total raised by AIM listed mining companies was just shy of £500m, the highest since 2011/12. It should be noted that these numbers have been adjusted to mitigate the impact of the very large Sirius fundraise in 2016/17.

Our analysis is that funding is available for mining companies that have good projects and good management teams that can bring a compelling investment story to the market.

Gold, uncertainty and havens

A big surprise for us has been the value of gold. Despite the significant political and economic uncertainty that has been a constant presence since 2016, gold has not become a haven investment and its price has only increased by 3% over the last 12 months.

What mining companies should be doing to make the most of the current situation.

We have five simple but effective pieces of advice for the leadership teams of mining companies. Our advice is based on the findings of our report but also on our longstanding and deep relationships with our mining clients and our broad experience of the sector.

Extracting Insights is produced by our Mining team. You can find out more about our work in mining and the team as well as get in touch to find out how the team can help you on here.